Acquisition and Cycle 3 Restatement

[msmith]

Company is acquired and they terminated their 401(k) Plan. The termination Resolution indicates that the Plan Termination Date was 12/30/2021. Mus the CYCLE 3 Restatement, with SECURE and CARES Acts Amendment be adopted before the Plan Termination Date?

Different rules for a Stock sale or an Asset sale?

Thank you.

 

[CuseFan]

Restatement of terminating plan is not required but plan must be up to date for all laws (including SECURES, CARES et al) - so best way to ensure that would be a cycle 3 restatement. Not sure on timing, if you do before you distribute assets I think you're safe. Do not think stock or asset sale matters.

[Nate S]

The Cycle 3 restatement does not include CARES and SECURE unless your provider has bundled them into "Good-faith" add-ons.  If the Plan will be "Final" by 7/31/2022, then Cycle 3 is not required, but CARES & SECURE must be adopted within 6(???) months of the Final date and not later than 12/31/2022.

[Bill Presson]

For terminating plans, we're doing the C3 and then a plan term CARES/SECURE amendment package provided by our document provider. It's a comfort thing. Especially if the client doesn't want to go in for a letter, which they never do.

[msmith]

Thank you Nate and Bill. As a matter of our practice, we are restating for CYCLE 3, with the interim CARES and SECURE Act amendments for terminating plans. However, some at our practice believe that the restatement and amendments must be adopted before the date of termination, referring to IRS Announcement 94-101.